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Broadcasting Decision CRTC 2004-16
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Ottawa, 21 January 2004 |
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HGTV Canada Inc.
Across Canada |
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Application 2002-0890-2
Public Hearing in the National Capital Region
26 May 2003 |
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Home and Garden Television Canada – Licence renewal
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In this decision, the Commission
renews the broadcasting licence for the specialty television service
known as Home and Garden Television Canada, from 1 March 2004 to 31 August
2010. The details regarding the licensee’s specific proposals for the new
licence term, and the conditions of licence and other obligations determined
by the Commission are set out below. |
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The application
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1. |
The Commission received an
application by HGTV Canada Inc. (HGTV Canada) for the renewal of the
broadcasting licence for the national, English-language, specialty television
service known as Home and Garden Television Canada (HGTV). |
2. |
The Commission's general analysis
with respect to its consideration of this and other applications heard at the
26 May 2003 Public Hearing for the licence renewal of specialty television
services is set out in Introduction to Broadcasting Decisions CRTC 2004-6
to 2004-27 renewing the licences of 22 specialty services, Broadcasting
Public Notice CRTC 2004-2, 21
January 2004 (Public Notice 2004-2). |
3. |
The Commission received 27
interventions specifically in support of HGTV’s licence renewal and
proposals, and four interventions expressing specific opposition to the
licensee’s proposed addition of game shows and drama programs to its nature
of service. The concerns raised by the interveners related specifically to
this application are discussed in the various sections of this decision. |
4. |
Other interveners raised general concerns
related to all of the specialty television licence renewal applications
considered as part of this public process. These concerns are discussed in
Public Notice 2004-2. |
5. |
On the basis of its review of this licence
renewal application and having considered the interveners' comments, the
Commission renews the broadcasting licence for Home and Garden
Television Canada, from 1 March 2004 to 31 August 20101.
The licence will be subject to the conditions specified therein and to the
conditions set out in the appendix to this decision. |
6. |
The licensee requested the renewal of the
licence for HGTV under the same terms and conditions as the existing licence,
with the exception of the addition of drama categories 7(a) Ongoing dramatic
series, 7(b) Ongoing comedy series (sitcoms), and 7(c) Specials, mini-series
or made-for-TV feature films, and category 10 Game shows to the list of
categories from which History may draw its programming, subject to specific
limits, as discussed below. |
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Expenditures on Canadian programming
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7. |
In each year of the current licence term, HGTV
Canada has been required, by condition of licence, to expend on Canadian
programs a minimum of 50% of the previous year’s gross revenues with respect
to HGTV. |
8. |
The Commission notes that the service’s
historical average profit before interest and tax (PBIT) margin has been less
than 20%. Taking this into account, and consistent with the approach
described in Public Notice 2004-2,
the Commission has determined that an increase is not warranted at this time.
Accordingly, the Commission is requiring the licensee to expend 50% of the
previous year’s gross revenues on Canadian programming. A condition of
licence to this effect is set out in the appendix to this decision. |
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Nature of service
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9. |
As part of its licence renewal application, the
licensee requested an amendment to the condition of licence describing its
nature of service, in order to add program categories 7(a), 7(b), 7(c) and 10
to the list of categories from which it may draw its programming. |
10. |
The licensee stated that, in order to ensure
that the proposed drama and game shows are consistent with the existing
programming on HGTV, all would have building and remodelling, or decorating
and interior design, or gardening and landscaping, or crafts and hobbies as a
central theme. HGTV Canada further stated that all of the additional
programming would be original Canadian programming commissioned for the
service, and that 50% of it would be acquired from independent producers. The
licensee also stated that it would accept a condition of licence to the
effect that no more than 5% of each broadcast year would be devoted to each
of categories 7 and 10. |
11. |
In support of its proposal, HGTV Canada
indicated that its proposed amendments would support the production of
original Canadian programming, and provide additional diversity in the
system, and stated that the changes would have no impact on other
broadcasters, given that the proposed programming would be consistent in
theme with HGTV’s current programming related to building, decorating,
gardening and hobbies. |
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Interventions
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12. |
As part of its general support for HGTV’s
licence renewal, the Directors Guild of Canada (DGC) stated that the proposal
to add drama programming to HGTV "will not convert the nature of the service
of the applicant, yet it provides a small window that might allow for the
creation and presentation of original Canadian drama". |
13. |
Global Television Network Inc. (Global) and
three individuals submitted interventions in opposition to the addition of
drama and game shows, suggesting that such programming is readily available
on other channels and falls outside the mandate of a service dedicated to
information programming on homes and gardens. |
14. |
Global expressed concern about the potential
impact of the addition of drama on conventional broadcasters, stating that
"the role of specialty services is and has always been to complement
conventional television services". Global further indicated its belief that
the addition of drama programming to HGTV’s programming would increase
pressure on the Canadian Television Fund (CTF), a fund which finances
Canadian production. Global claimed that this would reduce the ability of
conventional broadcasters to access the fund to meet their prime-time
priority programming requirements. Global expressed the view that "approval
of this proposal would result in further exacerbating an already serious
funding shortfall for Canadian drama". |
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The licensee’s reply
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15. |
In response to the concerns expressed by Global,
HGTV noted that the CTF was never meant for the exclusive use of conventional
broadcasters, and that a significant portion of financial support for the CTF
comes from distribution undertakings that derive a great deal of revenue from
the distribution of specialty services. HGTV Canada also expressed its view
that specialty services can make useful contributions to resolving the
problems surrounding the production and exhibition of Canadian drama
programming. |
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The Commission’s analysis and determination
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16. |
The Commission has considered whether the
proposal to amend the condition of licence setting out HGTV’s nature of
service would result in a significant shift in the nature of the service, if
it would be consistent with the Commission’s one-per-genre policy and whether
it would promote the objective of increased programming diversity. |
17. |
With respect to drama, the Commission notes that
the licensee’s commitment that no more than 5% of its programming schedule
would be devoted to drama programming would result in approximately six hours
of drama programming per week. The Commission considers that this amount of
programming would not represent a significant shift in the nature of HGTV’s
service. The Commission is satisfied that allowing HGTV to broadcast a
limited amount of drama programming is consistent with its treatment of other
information-based specialty services that are allowed to broadcast limited
amounts of drama. Further, given that any programming drawn from category 7
would be clearly related to the core themes of the current programming on
HGTV, the Commission is satisfied that the proposal would not have a negative
impact on other Canadian broadcasters. |
18. |
Finally, the Commission notes that any drama
programming broadcast on HGTV would be original Canadian programming new to
the Canadian broadcasting system, and would thus contribute to program
diversity and create improved opportunities for Canadian program producers. |
19. |
Accordingly, the Commission approves the
licensee's request to add program categories 7(a), 7(b), and 7(c) to the list
of categories from which HGTV may draw its programming. A limitation of 5%
per year has been placed on the use of all programming drawn from category 7.
The condition of licence describing the nature of service is set out
in the appendix to this decision. |
20. |
With respect to game shows, the Commission notes
that HGTV specified that any game shows to be broadcast would be related to
the service’s core themes, and that the ability to broadcast such material
would not enable HGTV to be directly competitive with any other Canadian
specialty service, since the licensee would continue to be constrained by its
nature of service. |
21. |
Accordingly, the Commission approves the
licensee’s request, and adds program category 10 to the list of categories
from which HGTV may draw its programming. The condition of licence
including this addition is set out in the appendix to this decision. |
22. |
The Commission notes that the licensee does not
foresee that game shows would represent more than 5% of the broadcast year,
and expects that the licensee will, as proposed, devote not more than 5% of
the broadcast year to game shows. |
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Canadian independent production
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23. |
In HGTV-TV Canada (Home and Garden
Television) – Approved, Decision CRTC
96-607, 4 September 1996 (Decision
96-607), the Commission noted the
licensee’s commitment to contribute $200,000 annually to script and concept
development. It also imposed a condition of licence which prohibited the
licensee from allocating any program development funds to its shareholders or
affiliated corporations. |
24. |
HGTV Canada indicated during this process that
it would be prepared to accept an expectation that at least 50% of the
Canadian programs broadcast on HGTV would be acquired from arms-length
producers. It further committed that, if its request to add drama programming
and game shows to the service were approved, 50% of all such programming
would be acquired from independent producers. It also indicated that it was
prepared to maintain its commitment to script and concept development. |
25. |
The licensee stated that its proposal of 50%
would be appropriate, given the nature of its daily, information-based
programming, much of which lends itself to in-house production and is less
attractive to independent producers. HGTV Canada further stated that it uses
independent producers for the more high-end design and garden shows that
often have potential for international sales. |
26. |
The Canadian Film and Television Production
Association suggested that a more appropriate level would be 75% of all
Canadian drama, game show and documentary programming. |
27. |
Given the nature of its programming, much of
which lends itself to in-house production, the Commission considers that it
is reasonable to expect HGTV Canada, for the duration of the new licence
term, to ensure that a minimum of 50% of all original, first-run Canadian
programming is acquired from non-related producers. The Commission expects
the licensee to ensure that it makes reasonable use of non-related producers
for Canadian drama programming. |
28. |
The Commission also notes the licensee’s
commitment to continue to expend a minimum of $200,000 annually for script
and concept development. |
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Regional reflection and production
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29. |
HGTV Canada stated that HGTV has presented
programming reflective of many different regions throughout its first licence
term, and that its relationships with the independent production community
reach across the country. |
30. |
The Commission expects the licensee to ensure
that the programming aired by HGTV reflects all Canada's regions. The
Commission also expects the licensee to provide opportunities for producers
working outside the major production centres to supply programming for the
service. |
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Programming shared between Life Network and HGTV
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31. |
In Decision
96-607, the Commission noted that none of the programming broadcast on
HGTV would duplicate that presented by the Life Network, a specialty
television service which has ownership in common with HGTV. |
32. |
When asked during this process about the
appropriateness of carrying this commitment forward, HGTV Canada stated that
the commitment is no longer necessary. The licensee argued that the original
commitment was made as a safeguard to ensure a marked distinction between the
two services and that, through the evolution of both Life Network and HGTV,
that distinction is now evident. HGTV Canada added that Life Network has
developed into a service that provides useful and entertaining lifestyle and
documentary programming, using programs with a less traditional how-to format
and more of a fact-based reality format. HGTV Canada further indicated that
programs broadcast on both HGTV and Life Network do not represent more than
15% of all programming offered by HGTV. |
33. |
The Commission notes that no interveners
expressed concern with respect to this matter, and that a limited overlap of
programming between the two services could create cross-promotional
opportunities. The Commission notes the licensee’s statements that programs
shared between Life Network and HGTV represent no more than 15% of all
programming. |
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Cultural diversity
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34. |
As stated in Public Notice
2004-2, the Commission expects
the licensee to endeavour, through its programming and employment
opportunities, to reflect Canada’s ethno-cultural minorities and Aboriginal
peoples. The Commission further expects the licensee to ensure that the
on-screen portrayal of such groups is accurate, fair and non-stereotypical. |
35. |
Alliance Atlantis Communications Inc., parent
company of the licensee, has not yet submitted to the Commission a formal
corporate cultural diversity plan, although the Alliance Atlantis
Broadcasting Cultural Diversity Best Practices plan was filed with this
application. At the hearing, the licensee stated that it would file a
corporate plan with the Commission within the next few months. |
36. |
In its application, HGTV Canada described the
ways in which it ensures the reflection of diversity in its original and
acquired programs.The Commission notes the initiatives that the licensee has
taken in this regard during the current licence term. As set out in Public
Notice 2004-2, the Commission
expects the licensee to file a corporate plan on cultural diversity, within
three months of the date of this decision, and to provide annual reports on
its progress in achieving the plan’s objectives. Such reports should be filed
no later than 31 December of each year of the new licence term, beginning
December 2005. |
37. |
As discussed in Public Notice
2004-2, the Commission further
expects the licensee to incorporate persons with disabilities into its
cultural diversity corporate planning and to ensure that this is reflected in
its annual reports on cultural diversity. |
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Employment equity and on-air presence
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38. |
Pursuant to section 5(4) of the Broadcasting
Act, the Commission does not regulate or supervise matters concerning
employment equity in relation to broadcasting undertakings with more than 100
employees, as they are subject to the Employment Equity Act. However,
the Commission continues to regulate matters such as on-air presence. |
39. |
The Commission expects the licensees of
specialty television services to ensure that the on-air presence of members
of the four designated groups (women, Aboriginal persons, persons with
disabilities and members of visible minorities) is reflective of Canadian
society, and that members of these groups are presented fairly and
accurately. |
40. |
The Commission notes that HGTV Canada does not
directly employ on-air staff. |
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Service to persons who are deaf or hard of hearing
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41. |
The Commission is committed to improving service
to viewers who are deaf or hard of hearing, and has consistently encouraged
broadcasters to increase the amount of closed captioned programming they
broadcast. The Commission generally requires all broadcasters to offer a
minimum percentage of closed captioned programs consistent with the nature of
their services. Most English-language services must close caption at least
90% of their programming. |
42. |
In the present case, the licensee made a
commitment to close caption 90% of all programming broadcast on HGTV during
each broadcast day of the new licence term. |
43. |
Consistent with this commitment and with the
Commission’s general approach for English-language services, the Commission
is imposing a condition of licence requiring the licensee to close
caption 90% of all programming aired during the broadcast day, beginning not
later than 1 September 2004. The condition of licence is set out in the
appendix to this decision. |
44. |
The 90% obligation is based on the recognition
that requiring 100% captioning at all times by condition of licence may not
be reasonable. Thus, the obligation is designed to provide some flexibility
to cover unforeseen circumstances (such as late delivery of captions,
technical malfunctions, or the lack of availability of captions for programs
acquired outside North America), or programming where captioning may not be
feasible, such as third-language programming. |
45. |
The Commission expects that, during the new
licence term, the licensee will focus on improving the quality, reliability
and accuracy of its closed captioning, and work with representatives of the
deaf and hard of hearing community to ensure that captioning continues to
meet their needs. |
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Service to persons who are blind or whose vision is impaired
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46. |
The Commission is committed to improving the
accessibility of television programming for persons with visual impairments
through the provision of audio description2
and video description (also known as described video).3 |
47. |
As part of this licence renewal process, HGTV
Canada stated its belief that, much of HGTV’s programming "necessitates a
tremendous use of audio description of the simultaneous video in detailing
exactly what is being worked on and how to benefit from this new knowledge".
With respect to described video, the licensee stated that many distributors
are currently incapable of transmitting described video signals. It stated
its commitment to resolve the technical difficulties, and when resolved, to
then provide described video programming. |
48. |
The Commission expects that, during the new
licence term, the licensee will: |
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- provide audio description wherever appropriate;
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- acquire and broadcast the described version of a program wherever
possible; and
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- take the necessary steps to ensure that its customer service responds
to the needs of viewers who have visual impairments.
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49. |
The Commission notes the licensee’s commitment
to broadcast a minimum of two hours of described video programming per month,
and to increase that amount to four hours per month, beginning in the seventh
year of the licence term. The Commission encourages the licensee to fulfill
this commitment. |
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Programming delivered across time zones
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50. |
As discussed in Public Notice
2004-2, the Commission expects
the licensee to demonstrate responsibility in the scheduling of programming
intended for adult audiences, taking into account time zone differences
between where the program originates and where it is received. |
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Compliance with industry codes
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51. |
In accordance with its usual practice for
specialty television services, the Commission is imposing conditions of
licence requiring the licensee to adhere to industry codes related to
sex-role portrayal, advertising to children, and the depiction of violence in
television programming. |
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Secretary General |
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This decision is to be appended to the
licence. It is available in alternative format upon request, and may also be
examined at the following Internet site:
http://www.crtc.gc.ca |
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Appendix to Broadcasting Decision CRTC 2004-16
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Conditions of licence
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1. (a) The licensee shall provide a national,
English-language specialty television service, providing advice and
instruction about homes and gardens. The licensee shall also provide Canadian
game shows and Canadian dramas that have been commissioned by the licensee
and which have building and remodelling, decorating and interior design,
gardening and landscaping, or crafts and hobbies as themes. |
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(b) The programming must be drawn exclusively from the following
categories, as set out in section 6 of Schedule I of the Specialty
Services Regulations, 1990, as amended from time to time:
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2 (a) Analysis and
interpretation
(b) Long-form documentary
3 Reporting and actualities
5 (b) Informal
education/Recreation and leisure
7 (a) Ongoing dramatic series
(b) Ongoing comedy series
(sitcoms)
(c) Specials, mini-series or
made-for-TV feature films
9 Variety
10 Game shows
11 General entertainment and
human interest
12 Interstitials
13 Public service announcements
14 Infomercials, promotional and
corporate videos
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(c) In each broadcast year, the licensee shall devote to programs drawn
from categories 7(a), 7(b) and 7(c) not more than a total of 5% of the
broadcast day.
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2. In each broadcast year, the licensee shall
devote to the exhibition of Canadian programs not less than 50% of the
broadcast day, and not less than 50% of the evening broadcast period. |
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3. In accordance with the Commission's position
on Canadian programming expenditures as set out in New Flexibility With
Regard to Canadian Program Expenditures by Canadian Television Stations,
Public Notice CRTC 1992-28,
8 April 1992, in The Reporting of Canadian Programming Expenditures,
Public Notice CRTC 1993-93,
22 June 1993 and in Additional Clarification Regarding the Reporting of
Canadian Programming Expenditures, Public Notice CRTC
1993-174, 10 December 1993: |
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(a) In each broadcast year of the licence term, the licensee shall
expend on the acquisition of and/or investment in Canadian programs a
minimum of 50% of the gross revenues derived from the operation of this
service during the previous broadcast year.
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(b) In each broadcast year of the licence term, excluding the final
year, the licensee may expend an amount on Canadian programs that is up to
five percent (5%) less than the minimum required expenditure for that year
calculated in accordance with this condition; in such case, the licensee
shall expend in the next broadcast year of the licence term, in addition to
the minimum required expenditure for that year, the full amount of the
previous year's under-expenditure.
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(c) In each broadcast year of the licence term where the licensee
expends an amount on Canadian programs that is greater than the minimum
required expenditure for that year calculated in accordance with this
condition, the licensee may deduct:
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(i) from the minimum required expenditure for the following year of
the licence term, an amount not exceeding the amount of the previous
year's over-expenditure; and
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(ii) from the minimum required expenditure for any subsequent
broadcast year of the licence term, an amount not exceeding the
difference between the over-expenditure and any amount deducted under (i)
above.
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(d) Notwithstanding paragraphs (b) and (c) above, during the licence
term, the licensee shall expend on Canadian programs, at a minimum, the
total of the minimum required expenditures calculated in accordance with
this condition of licence.
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4. (a) Subject to subsection (b), the licensee
shall not distribute more than twelve (12) minutes of advertising material
during each clock hour. |
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(b) Where a program occupies time in two or more consecutive clock
hours, the licensee may exceed the maximum number of minutes of advertising
material allowed in those clock hours if the average number of minutes of
advertising material in the clock hours occupied by the program does not
exceed the maximum number of minutes that would otherwise be allowed per
clock hour.
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(c) The licensee shall not distribute any paid advertising material
other than paid national advertising.
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5. The licensee shall charge each exhibitor of
this service a maximum monthly wholesale rate of $0.07 per subscriber, where
the service is carried as part of the basic service. |
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6. The licensee shall not remit any program
development funds to its shareholders or affiliated corporations. |
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7. The licensee shall provide closed captioning
for not less than 90% of all programs aired during the broadcast day,
beginning not later than 1 September 2004. |
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8. The licensee shall adhere to the guidelines
on gender portrayal set out in the Canadian Association of Broadcasters’
(CAB) Sex-role portrayal code for television and radio programming, as
amended from time to time and approved by the Commission. The application of
the foregoing condition of licence will be suspended as long as the licensee
remains a member in good standing of the Canadian Broadcast Standards Council
(CBSC). |
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9. The licensee shall adhere to the provisions
of the CAB’s Broadcast code for advertising to children, as amended
from time to time and approved by the Commission. |
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10. The licensee shall adhere to the guidelines
on the depiction of violence in television programming set out in the CAB’s
Voluntary code regarding violence in television programming, as
amended from time to time and approved by the Commission. The application of
the foregoing condition of licence will be suspended as long as the licensee
remains a member in good standing of the CBSC. |
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For the purpose of these conditions, the terms
"broadcast day", "broadcast month", "broadcast year", "clock hour" and
"evening broadcast period" shall have the same meanings as those set out in
the Television Broadcasting Regulations, 1987. The term "paid national
advertising" shall mean advertising material as defined in the Specialty
Services Regulations, 1990 and that is purchased at a national rate and
receives national distribution on the service. |
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Footnotes:
1 In Administrative
renewals, Broadcasting Decision CRTC
2003-290, 21 July 2003, the Commission granted a six-month administrative
renewal for Home and Garden Television Canada, from 1 September 2003 to
29 February 2004.
2Audio description
involves the provision of basic voice-overs of textual or graphic information
displayed on the screen. A broadcaster providing audio description will, for
example, not simply display sports scores on the screen, but also read them
aloud so that people who are visually impaired can receive the information.
3 Video description, or
described video, consists of narrative descriptions of a program’s key visual
elements so that people who are visually impaired are able to form a mental
picture of what is occurring on the screen. |